By Heard editors

What a difference one day can make in the capital markets.

Monday, stocks acted as if the emergence of DeepSeek's low-cost approach to AI would be a big problem. Today, the theory in some corners was that cheap AI will ultimately hasten adoption of the technology and benefit the broader industry.

Tech stocks that had swooned Monday, including chip maker Nvidia and database giant Oracle, posted solid gains on Tuesday. Nvidia finished the day up 8.9% while Oracle gained 3.6%.

The tech-heavy Nasdaq Composite added 2%, after its sharp pullback on Monday. The S&P 500 gained 0.9%, while the Dow Jones Industrial Average advanced 0.3%, or 137 points.

The dollar, meanwhile, gained after reports that President Trump said he wanted to impose universal tariffs that would be "much bigger" than 2.5%.

Boeing shares surged before closing up 1.5% despite reporting revenues shrank 31% in the fourth quarter of 2024 from a year earlier. It appears that markets are no longer paying close attention to the minutiae of Boeing's financial metrics, writes Heard's Jon Sindreu. Instead, they might be cheering the fact that free cash flow should be positive in the second half of the year as the many parked jets accumulated during years of trouble are finished and shipped to customers, he notes.

Shares of card lender Synchrony Financial were down sharply, falling 4.6%, following its earnings report on Tuesday. Synchrony executives told analysts that its customers in the fourth quarter were seen to "generally prioritize non-discretionary and seasonal holiday items," Heard columnist Telis Demos points out. That included moderating outlays on "bigger ticket" items and in non-essential categories, such as furniture, electronics, cosmetics and outdoor goods.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here.

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(END) Dow Jones Newswires

January 28, 2025 17:30 ET (22:30 GMT)

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